In respect of the shares or debentures, where a nomination has been made in accordance with the Companies Act, 1956, on the death of the shareholder, the nominee becomes entitled to the shares to the exclusion of all other persons. This facility is mainly useful for individuals holding shares in sole name. In the case of joint holding of shares by individuals, nomination will be effective only in the event of the death of all joint holders.

2.

Who can make nomination?

The nomination can be made only by individuals. If the shares are held jointly, all the joint-holders will need to sign the nomination form. Non-individuals including a society, trust, body corporate, partnership firm, karta of Hindu Undivided Family or holder of Power of Attorney, cannot nominate.

3.

How can I make a nomination?

You can make a nomination by filling in and sending us Form 2B singly if you are a sole holder or jointly if you are joint-holders. Our R&T Agent will verify your signatures, register your nomination and intimate you of registration of your nomination.

Can a shareholder nominate more than one person to hold shares jointly in the event of his demise?

Section 109A(1) provides for the nomination of "a person". Form 2B prescribed for nomination requires the "name and address of the nominee". The view is that only one nomination is allowed to be made per folio. However if the shareholders hold shares in more than one folio but in different order of names, then they can appoint different nominees under each folio.

5.

Can I change my nomination ?

You can change the nomination as and when you so desire by submitting Form 2B.

How does the Company establish the identity of the nominee in case of death of the shareholder?

The prescribed Form 2B only provides for the name and address of the nominee. Section 109B(1) provides that the Board may require the nominee to provide and produce such evidence to prove his identity as thought necessary in the opinion of the Board.

Without prejudice to the above, the shareholder may also provide the specimen signature of the nominee along with Form 2B.

The Company generally requires the following documents to be produced after the death of the original shareholder

Photocopy of death certificate of shareholder attested by a Bank Manager.

What is the effect of death of one of the joint holders on nomination?

In the event of death of one of the joint-holders, the shares get transmitted in the name of the surviving holder. The death of one of the joint holders does not rescind the nomination. Nominee will have title to the shares only on the death of all the joint-holders.

8.

Can the surviving joint holder make a fresh nomination by revoking earlier nomination ?

Under the laws of wills and testamentary dispositions, joint wills cannot be revoked after the demise of one of the joint testators. Extending the principle in this case would suggest that nominations made jointly cannot be revoked after the demise of one of the joint holders.

However under section 109A, the nomination made are to take effect notwithstanding testamentary dispositions, or otherwise.

Therefore on demise of one of the joint-holders the remaining joint-holder would become sole member. In such case, fresh nomination in prescribed manner could be made revoking the old nomination.

9.

Can a holder of partly paid shares make nomination?

Nominations can be made on partly paid up shares. However if at the time of demise of the shareholder there are any calls in arrears, then the nominee would be subjected to the same rights and liabilities as the original shareholder and the Board by virtue of Section 109B(3) will have discretion to register the shares in favour of the nominee.

10.

Can nomination be made in favour of a minor?

Yes. Nomination can be made in favour of a minor. In that event, the name and address of the guardian shall be given by the holder to whom the shares shall vest in the event of death of the shareholder during minority of nominee.

11.

Do further acquisition of shares under a given Folio get covered by the nomination ?

A shareholder is required to fill in the distinctive numbers of shares in Form 2B and the shares covered by these distinctive numbers shall be transmitted to the nominee in the event of death of the shareholder. For any further acquisition of shares of the Company, the shareholders will have to extend the nomination to the additional shares by filling in the necessary Form 2B, as the existing nomination does not automatically cover the additional shares. To ensure that the nomination is valid, the shareholders need to make specific mention of all distinctive numbers.

12.

Can a nominee transfer the shares after the death of the shareholder?

A nominee is entitled to transfer the inherited shares in the same manner as the deceased shareholder could have made, without having to transmit the shares in his name.

13.

What is the procedure for transmission of shares in favour of the nominee ?

Upon death of the shareholder or all the joint-holders as the case may be, the nominee is required to furnish the following documents for the purposes of identification :

Photocopy of death certificate of shareholder attested by a Bank Manager.

The R&T Agent, on production of above documents and any further documents, if required, and on being satisfied about the identity of the nominee, will request the nominee to elect either to register himself as holder of shares or to transfer the shares. The nominee is then required to issue a notice of election. There may be further identification requirements to be fulfilled at the discretion of the Board of Directors

If the nominee elects to be registered as a holder of shares, he shall send a notice in writing stating that he elects to be a member.

14.

Is the nominee entitled to dividend and other benefits before being registered as a member ?

Yes. However, if the Board has issued a notice to the nominee to elect and no election either to transfer or hold the shares/debentures in his/her name is made within a period of 90 days, the Board may withhold the payments of the dividends, bonus or other monies payable/accruing on the shares.

15.

Can the nominee exercise voting rights before being registered as a member?

A nominee is not entitled to exercise any voting rights before being registered as a member.

16.

Is it necessary for demat shareholders to nominate the same person whom they have appointed as their nominee for their physical shareholdings?

The nomination made by shareholders in respect of electronic holdings is distinct from their nomination for the physical holdings.

17.

Does transmission of shares to nominees attract payment of share transfer duty?

On death of the shareholder, the nominee has to elect either to register himself as a shareholder or to transfer the shares. If he elects to register himself as a shareholder, he has to intimate his decision in writing to the Company. This will be considered as transmission by operation of Law and, therefore, will not attract stamp duty.

If a shareholder elects to transfer the shares, he has to send a notice in writing to the Company. Since this amount to transfer of shares like any other transfer, the same would attract stamp duty.

18.

Whether the heirs of the nominee are entitled to the shares if the nominee dies before the nominator?

If the nominee dies before the shareholder the Company will transmit the shares in the name of the heirs or legal representatives or holders of the Succession Certificate/Letter of Administration of the shareholder. The heirs of the nominee are not entitled to the shares, if the nominee has predeceased the shareholder.